Draft SOW SET (Synopsis) 04132023.pdf

SUSTAINABLE ECONOMIC TRANSFORMATION (SET) ACTIVITY

DRAFT SECTION C

C.1 PURPOSE

The purpose of the Sustainable Economic Transformation (SET) Activity is to support sustainable economic opportunities and investment in a targeted geography to foster equitable and environmentally sustainable growth, development, and peace implementation, as outlined in the Country Development Cooperation Strategy (CDCS).

C.2 JUSTIFICATION

USAID has been assisting the Colombian Government to implement the 2016 Peace Accord. Unfortunately, implementation of the Peace Accords has been slower than expected. As of November 2021, 81 percent of the 104 stipulations defined under the Point 1, Comprehensive Rural Reform, had not been initiated or had a minimum level of implementation. This is a problem because high rural poverty rates, and the lack of profitable licit economic opportunities in rural areas, fuel an illicit economy, insecurity, and deforestation through the expansion of coca crop production and illegal mining.

As of 2020, Colombia had 245,000 hectares of coca, a significant portion (52 percent) of which is planted in national parks and protected areas. To effectively and sustainably advance comprehensive rural reform and address illicit crop cultivation and other illicit economic activities, eradication actions should be complemented with investments in: 1) environmentally sustainable, climate resilient, and profitable livelihood opportunities; 2) public and productive goods and services; and 3) other actions to improve rural competitiveness and climate adaptation planning and actions.

As it stands, agriculture is the main economic sector in rural Colombia and almost 60 percent of the rural population is employed, formally or informally, in agriculture. High reliance on agriculture demonstrates the lack of alternative, non‐agricultural productive activities available in rural communities, and there is a correlation between low agricultural competitiveness and high rates of rural poverty. Non‐agricultural opportunities have the potential to diversify, de‐risk and enhance rural economies, improve the resilience of socioeconomic systems to potential climate impacts, price and other economic shocks, and promote cultural knowledge. Diversification is crucial for women, considering that seventy‐three (73.7%) percent of rural women earn some income from non‐agricultural activities. The agricultural sector’s performance is negatively affected by a myriad of factors including: 1) lack of skilled workforce; 2) low value addition for final products; 3) inefficient commercialization practices and high transportation costs; 4) high informality and inadequate labor practices; 5) lack of productive assets like land, capital, and technology; and 6) climate change. In cases where agricultural producers are able to access additional land, they often try to compensate for low productivity and economic inefficiencies by expanding their crop area. The practice of trying to produce more through greater plots of cultivated land, rather than improved productivity on the same plot of land, increases deforestation, soil loss, and loss of biodiversity. Further complicating these issues is the war in Ukraine and the resulting increase in agricultural input prices, especially fertilizers. In turn, more expensive agricultural inputs translate to lower profit‐margins for producers and increased food commodity prices and thus rising food insecurity. As such, sustainable agricultural production systems, like silvopastoral and agroforestry models, are needed to develop a more sustainable and resilient food production system. Likewise, greater investment in non‐agricultural opportunities, like tourism, would help improve rural incomes and reduce environmental impacts associated with traditional agriculture.

Further, climate change has had, and will continue to have, a negative impact on economic development in Colombia. Climate events, like extreme floods, droughts, and higher temperatures negatively affect agricultural and livestock production and increase poverty, conflict, instability, and food insecurity. For example, the 2010 La Niña in Colombia resulted in economic losses equal to two percent of the country's Gross Domestic Product (GDP). Moreover, climate change is expected to reduce annual agricultural production in Colombia by 7.4 percent between 2010 and 2100. According to the World Bank, climate change events will negatively affect 80 percent of Colombia’s crops, including important exports like coffee, by 2050. Climate events also hinder rural communities’ access to public goods and services, like health centers, and can prevent producers from accessing markets. For example, during the 2022 hurricane season regional flooding prevented over 30,000 indigenous households in Uribia, La Guajira from accessing food, drinking water, and other essential resources. Recognizing the impact of climate change on economic growth and rural development, current and future investments in rural communities need to understand and account for the changing climate.

Finally, years of conflict have impaired trust within communities, and have eroded social norms that facilitate coordination and cooperation to achieve common goals and mutual benefits. For example, a lack of trust in communities can hinder business growth by discouraging local actors from establishing business agreements and alliances. As such, socially, economically, and environmentally sustainable development in rural areas can only occur if community, public, and private actors work together through participatory processes that build trust and encourage citizen participation in decision making.

C.3. THEORY OF CHANGE

IF there is rural economic diversification and competitiveness, led by communities, and target regions have the ability to adapt to economic shocks, including climate change, THEN there will be a better foundation for a sustainable peace.

C.4. OBJECTIVES

Objective 1:

Increased rural business growth and diversification

Objective 2:

Enhanced environment for rural economic competitiveness

IR 1.1: Improved business performance IR 2.1: Improved local development planning using climate information

IR 1.2: Increased inclusive private sector investment

IR 2.2: Increased investment in climate resilient infrastructure

Special IR 1.3: Increased access to financial services

IR 2.3: Improved community capacity to maintain and use infrastructure

Shared IR 1.4/2.4: Enhanced evidence for systems and policy change

Objective 1: Increased rural business growth and diversification

Under Objective 1, the Contractor will consider and leverage natural, cultural, and productive sectors in the targeted regions to promote licit, equitable, profitable, climate‐resilient, and sustainable economic opportunities. The Contractor will strengthen local businesses and value chains, both agricultural and non‐ agricultural, to improve firm level competitiveness and support rural economic diversification.

For agricultural activities, the Contractor will consider climate smart, regenerative agriculture, value addition, and other sustainable productive models, like permaculture, agroforestry and silvopastoral agriculture. For the SET Activity, rural economic diversification refers to those economic opportunities that are feasible, offer sustainable economic alternatives to reduce the expansion of the agricultural frontier, and mitigate potential impacts and vulnerabilities to climate change. Development models supported under this objective by the Contractor must: 1) follow a market driven approach: 2) be tailored to community skills and interests; and 3) incentivize inclusive investments that support climate resilience and prevent deforestation and biodiversity loss.

IR 1.1: Improved business performance

Under this IR, the Contractor will strengthen the competitiveness of existing businesses and value chains, and will support the development of new economically, socially, and environmentally sustainable, climate‐resilient income generating activities. This will include efforts to strengthen businesses and value chains’ operational and administrative capacities, in addition to climate awareness and climate resiliency.

For interventions under this IR, the Contractor will consider economic diversification potential in each target region, and include non‐agricultural activities, like sustainable tourism, that generate income while incentivizing environmental protection. The Contractor’s interventions must also develop the capacities of for‐profit community‐based organizations (CBO), like producers associations, to equitably: 1) strengthen and expand business opportunities; 2) establish market‐driven business alliances; 3) negotiate business terms with private sector partners; and, 4) improve community resilience to climate change.

IR 1.2: Increased inclusive private sector investment

Under this IR, the Contractor will mobilize and leverage investment from micro, small, medium, and large private sector companies from diverse sectors to support socially and environmentally sustainable businesses and value chains. The Contractor will identify opportunities and facilitate private sector monetary and non‐monetary investments that align with core business interests. For example, food sector businesses will be encouraged to invest in sustainable and climate resilient agricultural models, like silvopastoral systems, to strengthen quality and reliability of production. Private sector investment may include but is not limited to: capacity building; technology transfer; market knowledge transfer;

productive infrastructure; and business or other innovation, expansion, and financial investments. The goal of private sector investment will be to grow and enhance the economic, environmental, and social sustainability of local businesses, value chains, and to strengthen the local economic environment. The Contractor will also incentivize investment in interventions that promote the sustainable use of natural and cultural assets, mitigate deforestation, and promote biodiversity protection and climate adaptation.

In addition to alignment with core business interest investments, the Contractor will also leverage strategic long term Corporate Social Responsibility (CSR) programs, especially if those CSR programs relate to public goods and services provision.

Special IR 1.3: Increased access to financial services

Under this Special IR, the Contractor will improve businesses and local value chains’ access to financial services, like credit, savings accounts, digital payment services, and other new and relevant financial tools and services. Micro, small, and medium‐sized businesses (MSME), service, and logistics providers all need access to a variety of financial services to maintain and grow their businesses. The Contractor will achieve this IR by linking businesses, including relevant women‐led businesses, with existing financial institutions, services, and products, primarily by closely coordinating and collaborating with the USAID’s Equitable Finance Activity and Climate Finance Activity. To this end, the Contractor will supplement and complement the work done by these USAID financial activities. For example, the Contractor will provide bankability readiness support to businesses to help them apply for, receive, and manage credit or other financial services. In case no USAID activity could provide the connection to financial complementary services, SET will take the lead to link businesses to financial service providers.

Objective 2: Enhanced environment for rural economic competitiveness

Under Objective 2, the Contractor will nurture the enabling environment needed to support sustainable economic activities in rural areas. The Contractor will foster a more competitive, resilient, and attractive rural economic landscape for investment, will promote open dialogues between the CBOs, private sector actors, and local and national governments, and will create and sustain links to municipal, departmental, and national markets. The contractor will use climate information and mobilize public and private sector investment to develop climate resilient public and productive infrastructure. Climate resilient infrastructure is infrastructure that is designed, built, delivered, and/or operated in a way that anticipates and adapts to changing climate conditions, and withstands potential shocks. Examples of climate resilient infrastructure that could be supported under this objective include but are not limited to: tertiary road improvements; crop collection and processing centers; flooding control works; and water source protection. The use of climate information in identifying and prioritizing investments in infrastructure can help prevent supply chain disruptions, improve productivity, facilitate uninterrupted access to markets, and reduce economic losses. The Contractor will also support digital connectivity interventions as improved digital connectivity is needed to facilitate regional actors’ access to climate and market information. Finally, for interventions under this objective, the Contractor will prioritize, and support businesses and value chains identified under Objective 1.

IR 2.1: Improved local development planning using climate information

Under this IR, the Contractor will improve community, public, and private actors’ ability to plan effectively by encouraging and enabling these actors to use relevant, best available climate information and technologies in local planning, including production. Climate information includes data like changes in precipitation patterns, temperature fluctuations, timing of frost, heat waves, and more. As such, climate information serves as an essential input for planning and management related to: 1) finance and budgets;

2) infrastructure, like roads and collection centers; and 3) services, like electricity and irrigation. For example, climate information can help private sector actors make informed decisions on input sourcing and facility siting.

Under this IR, the Contractor will work with local actors to use climate information when making productive and managerial decisions and solving relevant issues affecting their development. Moreover, the Contractor will engage all forms of CBOs, including producer organizations, cooperatives, and community enterprises, in the planning process to define local investment priorities, and to develop regional development plans that consider climate adaptation. Access to climate information will need digital connectivity in rural areas; therefore, the Contractor will support actions under IRs 2.2 and 2.3 accordingly.

IR 2.2: Increased investment in climate resilient infrastructure

Under this IR, the Contractor will improve the conditions of small‐scale public and productive infrastructure and will leverage and mobilize private and public investments in climate resilient infrastructure, including public and productive goods and services. Through these investments, the contractor will improve the quality, productivity, ability to add value, market connectivity, and climate resilience of target businesses and value chains. Public and productive goods and services provide benefits to rural communities in general, and the Contractor’s interventions under this IR will follow a market‐ oriented approach, which will be linked to existing businesses and value chains, and to new opportunities.

Moreover, support for local actors’ analysis, planning, and prioritization of infrastructure investment and opportunities will be informed by climate information under IR 2.1. For instance, climate projections about precipitation and temperature will help guide investment decisions on whether water reservoirs will be needed.

IR 2.3: Improved community capacity to maintain and use infrastructure.

Under this IR, the Contractor will improve community capacity to maintain, use, and prioritize climate resilient infrastructure investments that positively impact local businesses, value chains, and economic competitiveness. Specifically, the Contractor will: 1) enhance CBOs’ abilities to advocate for infrastructure needs in public decision‐making spaces; 2) increase the active participation of rural communities in the establishment, implementation, and monitoring of public goods and services; and 3) help municipal and departmental governments access resources needed to provide public goods and services, such as tertiary road improvements and community‐led irrigation systems. The Contractor will work through local systems and institutions to facilitate communities’ participation through a learning‐by‐doing approach that leads to strengthened local capacities in the long term and enables communities to continue managing and improving local infrastructure once the activity ends. Using this approach, the Contractor will increase local ownership, maintenance, and sustainability of climate resilient infrastructure delivered. The Contractor will also collaborate with other USAID activities, like Responsive Governance, to help municipal governments access resources needed to provide public goods and services, such as royalties funds and to make positive changes so the system of accessing infrastructure is more straightforward.

Shared IR 1.4/2.4: Enhanced evidence for systems and policy change.

Under this shared IR, the Contractor must create or strengthen sustainable mechanisms for dialogue among local communities, between local communities and the state (local, departmental and national), create networks of community organizations and advocacy groups, and as necessary and appropriate, utilize local, regional and national media as public relations messaging tools to complement activities implemented in the regions.

The Contractor will also use these dialogue mechanisms to provide inputs and insights for structural and systemic changes required to sustainably enable the economic dynamics in targeted regions. Also, the Contractor will make recommendations to improve existing policy implementation in order to make policies and processes more responsive to communities’ needs and to private sector and market incentives. Through this work, the Contractor will transmit CBO experiences, needs, and priorities to government actors, so that community level perspectives can be considered and addressed in municipal, departmental, and national public decision‐making spaces. While implementing interventions under Objectives 1 and 2, the Contractor will gather evidence‐based information and experiences from the public and private sectors and communities and will then share this information to inform select regional and national public policy development and/or adjustments related to rural economic development planning and implementation, including rural climate adaptation efforts. Such efforts will ultimately serve to increase local relevance and participation of local communities in their own regional development and incorporate local needs into local, regional, and national development plans.

C.5. GEOGRAPHIC FOCUS

This Activity will target municipalities that have: 1) been historically neglected; 2) been affected by Colombia’s armed conflict; 3) the presence of illicit crops; and 4) increasing economic vulnerability to climate change. The goal of targeting these municipalities is to assist communities in the development of resilient economic opportunities, thereby providing them with a path out of poverty while building tools to combat and mitigate climate change.

The following additional criteria were used to define specific municipalities within the geographic regions of focus:

Rural and/or PDET municipalities;

Municipalities impacted by violence, coca, and/or other illicit activities;

Municipalities with economic sectors that have increased vulnerability to climate change impacts;

Municipalities in which other USAID activities, such as Equitable Finance, Destination Nature, Land for Prosperity, and others, are active; and Municipalities with previous USAID interventions that could be leveraged and strengthened to achieve the development tipping point.

The geographic regions of focus for this activity include rural areas of 30 municipalities in six departments:

1) Cauca; 2) Guaviare; 3) Guajira; 4) Meta; 5) Nariño; and 6) Putumayo. The list of specific municipalities where work will be implemented is provided in Section J.X. These municipalities may be updated over the life of the contract due changing circumstances. Any potential changes to the target municipalities will be discussed with USAID/Colombia considering relevant factors such as security conditions, political changes and Mission’s priorities.

C.6. RESULTS AND PERFORMANCE INDICATORS

The results of SET implementation will be measured according to specific metrics. At a minimum, the SET is expected to achieve the following:

1) At least 300 businesses in the target geography with improved performance.

2) At least 700 local community organization’s representatives actively participate in and influence local and regional peace implementation and development mechanisms like the municipal and departmental committees on peace, productivity, food, and nutrition.

3) At least 62 million dollars of private‐public funds leveraged for advancing local development initiatives prioritized by communities.

4) At least 30 municipalities with social and productive infrastructure activities completed after actively using community participation mechanisms.

5) At least 70% (min. 210) of the businesses supported under objective 1 using formal financial services.

6) At least 90% (min. 270) of the supported business plans include climate‐change adaptation actions.

7) At least 150 public‐private partnerships established.

8) At least 400 development proposals presented by CBOs and local supported businesses to government actors, like municipal and departmental administrations, and potential private partners for funding consideration.

Also, the Contractor will incorporate a number of USAID standard indicators for economic growth and climate adaptation. Indicators must be sex‐disaggregated, and whenever possible, also disaggregated by age, ethnicity, education, and socioeconomic status. Indicators will be used as a basis for monitoring activity progress and measuring contractor performance.

Potential indicators include:

OBJECTIVE 1 ILLUSTRATIVE INDICATORS

IR 1.1:

Improved business performance.

An average increase of profits of supported businesses and value chains by a minimum of 50% over the life of the Activity.

At least 50% increase in sales for support services and businesses.

Number of people receiving livelihood co‐benefits (monetary or non‐ monetary) associated with the implementation of USG sustainable landscapes and USG adaptation activities

IR 1.2:

Increased inclusive private sector investment.

Number of private sector engagements established with community organizations that build cooperation and trust between entities.

Value ($) of private resources leveraged for advancing economic development initiatives.

Number of private sector enterprises with improved participation in the local economy as a result of USG assistance.

Amount of dollars invested in improved climate‐resilient services and infrastructure.

Special IR 1.3:

Increased access to financial services.

At least 80% of the businesses supported under objective 1 using formal financial services.

Percentage of female participants in USG‐assisted programs designed to increase access to productive economic resources (assets, credit, income or employment) (GNDR‐2)

OBJECTIVE 2 ILLUSTRATIVE INDICATORS

IR 2.1:

Improved local development planning using climate information.

Number of adaptation actions included into the supported business plans.

Number of people trained in climate change adaptation supported by USG assistance.

Number of people supported by the USG to adapt to the effects of climate change.

Number of people using climate information or implementing risk‐ reducing actions to improve resilience to climate change as supported by USG assistance.

IR 2.2: At least $60 million in public and private leveraged funds.

Increased investment in climate resilient infrastructure.

Amount of dollars invested in improved climate‐resilient services and infrastructure.

At least 50% of reduction in average transportation time.

IR 2.3: Improved community capacity to maintain and use infrastructure.

Number of infrastructure improvement and maintenance initiatives presented by community‐based organizations to public and private partners after USG interventions.

Number of public and productive infrastructure projects implemented and/or overseen/supervised by the benefiting communities.

Number of people supported by the USG to adapt to the effects of climate change.

Shared IR 1.4/2.4:

Increased collaborating, learning, and adapting (CLA) for systems change.

Number of public policy initiatives and adjustments presented to regional and national decision making spaces, as well as USAID’s Activities leading the public policy discussions.

In addition to the above indicators, Offerors may propose their own custom indicators to be included.

C.7. Activity Fund

To achieve the expected results, SET will have an Activity Fund that will be made available to co‐finance eligible activities that are functional, sustainable (economically, socially, and environmentally) and scalable. Funds will be used to develop licit economic opportunities, improve local economic competitiveness through public and private investment in goods and services, improve CBOs engagement and participation in local development and discuss and implement climate‐change adaptation actions.

The Activity Fund will be used as an incentive mechanism to:

1) support the diversification and improve the competitiveness of prioritized rural and sustainable economic activities;

2) increase investment by the public and private sector in productive activities that expand licit economic and improve climate‐change resilience;

3) support the improvement of climate‐resilient public and productive infrastructure needed to provide services to targeted communities;

4) provide assistance to strengthen CBOs capacities; and

5) conduct climate‐change adaptation strategies.

The Activity Fund must complement efforts from other relevant stakeholders and will encourage product and process innovation, attract new public and private funding sources, and help align the private and development sector interests. Activities to be funded must be prioritized using a Market Systems Development approach. The Activity Fund can be used for subcontracts, grants under contract (GUCs), and short‐term technical assistance (STTA) contracts that demonstrably assist the contractor in the achievement of the SET’s programmatic objectives and results. The size of the Activity Fund over a five‐ year period must be at a minimum 50% of the total USAID financed budget. When necessary, potential grants will be delivered in‐kind and may include equipment, training, technical assistance, etc. The Contractor will also use these funds for provisional technical assistance activities in pursuit of the SET objectives. In these situations, there may be limited leverage, but the Contractor remains responsible for the overall leveraging targets. The Contractor is responsible for negotiating, awarding, and monitoring any awards under the Activity Fund in accordance with USAID policies. Pursuant to ADS 302.3.4.13, USAID must be significantly involved in establishing the selection criteria and must approve the subcontractors/recipients. Potential eligible applicants for the grant fund include national, regional, and local producers; US and local NGOs; foundations and universities; private businesses, business chambers, local, regional and central government projects. Government entities are not eligible to directly receive USAID funding with the exception of in‐kind assistance.

SET will use the Activity Fund and work with communities, producer associations, municipal and regional governments, the national government, the private sector and other relevant stakeholders to get the required 1:2 leverage. Pursuant to ADS 302.3.4.13, Subcontracts, GUCs and STTAs must be used to demonstrably assist the Contractor in the achievement of the Activity’s programmatic objectives and sustainable results. They will be used as an incentive mechanism to:

1. increase licit and sustainable economic opportunities, including climate‐smart, through business and value chain development;

2. increase investment by the public and private sector in productive activities that expand sustainable economic opportunities;

3. improve the capacities of producer organizations and other CBOs and the efficiency and effectiveness of supply and value chains to meet market demands and improve climate‐change resilience;

4. expand sustainable and climate‐resilient infrastructure needed to provide services to targeted communities, connect producers to markets, improve the quality of life for rural communities, link communities to local and regional communication and roads networks; and;

5. promote innovative alternatives to facilitate technical assistance.

C.7.1. Infrastructure Interventions

The total estimated cost of all infrastructure interventions under this award is expected to not exceed 10% of the Total Estimated Cost (TEC). Infrastructure interventions must be used with the objective to promote the goals and objectives of this award. The scope, location, cost, and rationale for each infrastructure intervention must be based upon needs, ability to operate and maintain, and overall support of the overarching goal of this award. Each intervention must be identified in the Annual Work Plan. Construction may be executed by local partners or contractors and will consist of two distinct categories:

1. Basic Public Infrastructure: Includes but is not limited to improvement and maintenance of tertiary roads, community‐owned drainage and irrigation systems, clean energy and digital connectivity services, training facilities, etc.

2. Productive Infrastructure: Includes but is not limited to post‐harvesting facilities, collection centers, cold‐chain facilities improvements, etc.

No architecture, engineering, construction or related work activity will take place without the written consent of the CO for each intervention, even if the Contractor has an approved purchasing system in place. The Contractor must obtain written consent from the CO for any architecture, engineering, construction or related subcontract (hereby known as “infrastructure intervention”) per FAR 44.201‐1(a).

Failure to obtain written approval by the CO prior to engaging in such work will be considered non‐ reimbursable in all cases and at the sole risk of the Contractor.

No infrastructure intervention will occur under Grants under Contract (GUC). Any infrastructure intervention or portion thereof conducted under a grant will be considered non‐reimbursable in all cases and at the sole risk of the Contractor. This includes but is not limited to providing limited and/or full support to infrastructure interventions with the assistance of materials, funds, oversight, design plans, etc.

The Contractor must manage all interventions in a responsible, efficient, and professional manner. In the event of a change order or claim, the Contractor must provide all details, recommendation, and history of the claim to the CO and COR for approval within five (5) calendar days of being aware or notified of a pending claim. In the event the CO, at their sole discretion, determines the claim is at the fault of the Contractor, the Contractor will be fully liable and responsible for all fiduciary and liability costs associated with the claim.

The contractor must ensure all infrastructure interventions comply with 2015 International Building Code, local standards and codes and the United States American Disabilities Act. In the event of a discrepancy, the more stringent will apply. In the rare event the application of the code and standards will cause a significant non‐fiscal related adverse event, the Contractor must provide such justification in a written waiver request to the CO for approval.

The Agency’s preferred approach as stated in ADS 201_maw is considered the ‘least risky’ approach for infrastructure interventions and serves as the benchmark for required construction risk screening. All infrastructure interventions under this award must conform to the USAID Preferred Approach for Construction and must be firm‐fixed‐priced.

As USAID funds will be used to leverage both public and private funding for infrastructure interventions, the Contractor must employee a third party licensed and reputable architecture and engineering firm (A&E) to provide design and/or quality oversight of the infrastructure intervention, regardless if the project is carried out by the Contractor or others. The firm must be licensed locally and/or in the United States of America, registered, and qualified for the work requested. The Contractor must utilize the SF330 form and procedures in the selection of the A&E firm. The Contractor will work with the COR to ensure compliance with USC Title 3601 and Title 3603 fee requirements for the A&E Firm, as well as the preferred approach as stated in ADS 201_maw. The Contractor must utilize a qualified A&E firm for the following:

1. Pre‐Design Phase: analyses supporting feasibility of the planned activity on the following critical issues: alternatives/cost‐benefit analysis; community/stakeholders participation during design, building, and maintenance; climate risk; promoting equity between men and women and preventing violence; land rights; local construction capacity; stakeholder analysis; building codes;

and environmental impact.

2. Design Phase: Develop schematic to stamped final Construction Documents.

3. Procurement Support: Provide technical support for all construction contract procurements and independently provide a professional opinion on prices and qualifications of the firms.

4. Operations and Maintenance (O&M) Phase: Develop the O&M manuals, which also address long term sustainability.

5. Construction Oversight: Provide quality assurance, health and safety, and technical oversight/support during the construction process and confirm construction was completed in accordance with the approved Construction Documents.

6. Handover Phase: Assist in the handover process as requested.

Prior to engaging in the design of any infrastructure intervention, the Contractor must:

1. Obtain a signed and mutually agreed upon Implementation Letter which outlines the purpose, responsibilities, cost, scope and other essential information with the Contractor, intervention end user, and owner, if different from the end user.

2. Verify land title ownership is clear of any issues, contests, is owned by the government and not a private entity, group, NGO, etc. In the event the owner is non‐governmental, the Contractor must request approval in writing from the CO explaining the purpose, need, rationale, and certification no other site is acceptable or appropriate, and that the Contractor and its personnel have no relationship with the applicable party(is).

3. Develop a preliminary operations and maintenance plan which assesses and includes realistic operational, fiduciary, and other responsibilities for each party for the intended design life of the infrastructure intervention.

4. Carry out technical studies/assessments as deemed necessary and appropriate.

When selecting the construction contractor or utilizing local communities, the Contractor must abide by the preferred approach as stated in ADS_201 maw, in addition to the following for each intervention:

1. If applicable, selection of the construction contractor based upon the lowest price technically acceptable proposal.

2. Require compliance with all local and US best practice health and safety practices.

3. Project schedule using the Critical Path Method and ensuring all major milestones and critical tasks are included.

4. Detailed unit quantity cost estimates.

The Contractor must work with the COR and USAID Engineer in a professional and prompt manner and provide all requested information no later than five calendar days, unless otherwise agreed by the COR and FSN Engineer in writing. USAID reserves the right to hire its own third‐party A&E firm to verify the work completed by the Contractor and solely for USAID’s benefit. The Contractor must coordinate and provide all information to USAID’s third‐party firm. The Contractor will not take direction, unless it addresses an immediate life safety risk, from USAID’s third‐party A&E firm. In the event the Contractor must deviate from the preferred approach as provided in ADS 201_maw, the Contractor must submit a written justification to the COR and CO for approval.

C.8. GENERAL ORGANIZING PRINCIPLES

C.8.1. Private Sector Engagement (PSE): PSE is a strategic approach to planning and programming through which each USAID activity consults, strategizes, and collaborates with the private sector for greater scale, sustainability, and effectiveness of development. The PSE umbrella concept includes public‐private partnerships (PPPs). Private sector partners bring special resources, expertise, technologies, capabilities, and other resources to the table that can augment the impact of USAID interventions when strategically aligned. PSE is key for designing market‐driven solutions and sustainable investments that go beyond the life of the activity. The Contractor must identify strategic long‐lasting engagement with the private sector throughout the activity’s components. USAID/Colombia has a team of PSE experts that can support this activity’s PSE efforts by facilitating connections, coordinating meetings, and providing support to construct the activity’s PSE Strategy. The Contractor will ensure the COR and/or member of the USAID PSE team will be present at high level meetings with potential private sector partners. The contractor will also seek partnerships related to digital tools and technology to support implementation of all activity components. Private sector actors engaged in this activity may include micro and small businesses, in addition to larger companies.

C.8.2. Gender and Inclusion: Consistent with USAID’s goals and objectives, the Contractor will reduce barriers related to gender, ethnicity, migration status, ability, sexual orientation and/or other relevant characteristics. The Contractor will also promote licit economic opportunities and investments that benefit marginalized community members including, but not limited to: women, youth, indigenous peoples, Afro‐Colombians, persons with disabilities, and members of the lesbian, gay, bisexual, transgender, queer, and intersex (LGBTQI+) community. An inclusive approach in all activity interventions is critical to narrow disparities and improve the quality of life of people living in rural areas. To guarantee representation in the public spaces where potential interventions will be discussed, the Contractor will work to eliminate the specific barriers that impede marginalized groups’ participation. The Contractor will also have a special focus on engaging youth to promote CBO’s leadership renewal, engagement in climate adaptation planning and use, and business and value chain innovation. Moreover, diversification of rural economic activities will be key to support women economic empowerment and climate adaptation participation and leadership.

C.8.3. Environment and Climate Change: The Contractor will promote the use of clean energy sources and environmentally sustainable practices in all the interventions supported. The Contractor will contribute to reduced deforestation and the protection of biodiversity through improved agricultural efficiency, and the promotion of environmentally sustainable development opportunities, like sustainable tourism and silvopastoral models. The Contractor must evaluate and mitigate potential environmental impacts of its interventions during the planning process, particularly those environmental impacts related to improved infrastructure and entrepreneurship and business activities.

C.8.4. Digital Connectivity: Some Activity interventions may seek to improve rural communities' access to, and use of, digital technologies and internet connectivity. Digital technologies will be used to the furthest extent possible to improve or scale‐up this activity’s impact. To ensure that digital tools and/or innovation supported by the Activity have the greatest positive impact on beneficiaries, the Contractor will use the principles for Digital Development. The Contractor will consider and address all digital technology used and promoted during the life of the Activity as follows: 1) beneficiaries’ digital literacy;

2) the digital divide between marginalized and non‐marginalized populations; and 3) cybersecurity issues and the need for digital hygiene education. Finally, the deployment and use of digital technologies must include a sustainability strategy by looking to guarantee operation after this Activity ends.

C.8.5. Community Participation: To promote self‐reliance and long‐term sustainability, the Contractor must work with community, public, and private Colombian organizations to the maximum extent possible. USAID’s previous experience demonstrates that communities’ active participation in the design and implementation of the activities can protect investments from extortion and illegal armed groups.

Thus, the Contractor must engage communities in design processes which will improve community ownership and sustainability of interventions. Also, the Contractor must strengthen CBOs’ oversight and accountability capacities and mechanisms to increase trust between community, public, and private actors and reduce the risks of corruption and extortion. As a result, there will be an increased communication and collaboration between community, public, and private actors will also contribute to leveraging public and private funding to complement USAID’s efforts.

C.8.6. Adaptive Management: The Contractor will adapt its management and implementation strategy to the changing political, economic, and security context in its target geography. To this end, the Contractor will continuously monitor the security situation and will coordinate with the local authorities, communities, the partner liaison security office, and the USAID Security Liaison Specialist to increase or decrease the number or intensity of its interventions in target regions as needed. The Contractor will also participate in USAID/Colombia’s Citizen Security Working Group and will coordinate with USAID Peacebuilding and Governance Office (PGO) activities to provide self‐protection and other relevant training to community leaders when necessary.

C.8.7. Regional Integration: The Contractor will build upon previous USAID interventions that promoted sustainable economic alternatives. The Contractor will pursue regional integration opportunities with complementary USAID activities including, but not limited to: Energy for Peace; Destination Nature;

Generating Equity; Equitable Finance; Responsive Governance; and more. Particular attention will be given to the identification and advancement of regional integration opportunities in Mission prioritized geographic areas of Pacífico Nariñense, and Guaviare. As part of this effort, the Contractor will actively participate in coordination and planning spaces organized by USAID/Colombia’s Regional Integration team to ensure close coordination, facilitate integration, and avoid duplication of efforts with other USAID and/or donor activities. The Contractor will not act on any recommendations from the Regional Integration team without the written approval from the COR.